Works contractor
Management contracting is a procurement route in which the works are constructed by a number of different works contractors who are contracted to a management contractor.
The management contractor is generally appointed early in the design process so that their experience can be used to improve the cost and buildability of proposals as they develop as well as to advise on packaging (and the risks of interfaces). This also enables some works contracts to be tendered earlier than others, and sometimes, even before the design is completed (for example, piling might commence whilst the detailed design of above ground works continues). This can shorten the time taken to complete the project, but does mean that there will be price uncertainty until the design is complete and all contracts have been let.
Management contracting differs from construction management in that management contractors contract the works contractors direct whereas construction managers only manage the trade contracts, the contracts are placed by the client. In legal terms the management contractor is acting as a principal whereas the construction manager is acting as an agent.
This means that on a management contract, the client only has one contract to administer (whereas with construction management there can be many contracts for the client to administer), but they might want warranties from the works contractors so that they can make a direct claim against them, for example if the management contractor becomes insolvent.
See also: Management contracting - pros and cons.
The contractual components of a management contract project are likely to include:
- The contract between the client and the management contractor.
- Contracts between the management contractor and each works contractor.
- An agreement between the client and each works contractor. There is a body of opinion that believes that if a management contractor operating on a cost plus fee arrangement pursues a works contractor in court for non-performance, the management contractor is unable to prove loss and damages. This is because the loss is simply passed on to the client, and so it is the client that has incurred the damage. This has increased the tendency for clients to require direct warranties with each works contractor.
- Management contractor collateral warranties for funders, tenants or purchasers.
- Works contractor collateral warranties for funders, tenants or purchasers.
Features of works contracts include:
- Works contracts must now have their own separate certification of practical completion and so may have different defects liability periods. Certification cannot be dependent on completion of works outside of the scope of that contract.
- As works contracts may be completed at different times, the management contractor must ensure that measures are in place to protect completed work from ongoing activities.
- Works contracts may allow for retention, or may include a requirement for a retention bond.
- Works contracts may include a requirement for a bond in relation to off-site materials and goods.
- Where they carry out design, works contractors may be required to provide professional indemnity insurance. Otherwise, they may be required to provide product liability insurance.
- Management contractors should keep works contractors informed about the overall progress of the project so that they are able to properly plan the timing of their works. They must also inform works contractors about certain key dates and certificates.
- Works contracts may include incentivisation.
- Works contractors may be required to agree an outline programme with the client setting out dates for the provision of information required by the client's consultant team.
NB: For a detailed description of the sequence of tasks necessary on a management contract, see our free work plan - Management contract: outline work plan.
[edit] Related articles on Designing Buildings Wiki
- Back-to-back provisions in construction contacts.
- Collateral warranties.
- Construction manager.
- Contract.
- Design, build, manage contractor.
- Management contract.
- Management contracting - pros and cons.
- Operative.
- Procurement route.
- Sub-agent.
- Sub-contractor.
- Trade contractor.
- Types of contractor.
- Work package contractor.
Featured articles and news
Twas the site before Christmas...
A rhyme for the industry and a thankyou to our supporters.
Plumbing and heating systems in schools
New apprentice pay rates coming into effect in the new year
Addressing the impact of recent national minimum wage changes.
EBSSA support for the new industry competence structure
The Engineering and Building Services Skills Authority, in working group 2.
Notes from BSRIA Sustainable Futures briefing
From carbon down to the all important customer: Redefining Retrofit for Net Zero Living.
Principal Designer: A New Opportunity for Architects
ACA launches a Principal Designer Register for architects.
A new government plan for housing and nature recovery
Exploring a new housing and infrastructure nature recovery framework.
Leveraging technology to enhance prospects for students
A case study on the significance of the Autodesk Revit certification.
Fundamental Review of Building Regulations Guidance
Announced during commons debate on the Grenfell Inquiry Phase 2 report.
CIAT responds to the updated National Planning Policy Framework
With key changes in the revised NPPF outlined.
Councils and communities highlighted for delivery of common-sense housing in planning overhaul
As government follows up with mandatory housing targets.
CIOB photographic competition final images revealed
Art of Building produces stunning images for another year.
HSE prosecutes company for putting workers at risk
Roofing company fined and its director sentenced.
Strategic restructure to transform industry competence
EBSSA becomes part of a new industry competence structure.
Major overhaul of planning committees proposed by government
Planning decisions set to be fast-tracked to tackle the housing crisis.
Industry Competence Steering Group restructure
ICSG transitions to the Industry Competence Committee (ICC) under the Building Safety Regulator (BSR).
Principal Contractor Competency Certification Scheme
CIOB PCCCS competence framework for Principal Contractors.
The CIAT Principal Designer register
Issues explained via a series of FAQs.
Comments
To start a discussion about this article, click 'Add a comment' above and add your thoughts to this discussion page.